Social relationships (e.g., friends, couple etc.) form the basis of the social network in our daily life. Automatically interpreting such relationships bears a great potential for the intelligent systems to understand human behavior in depth and to better interact with people at a social level. Human beings interpret the social relationships within a group not only based on the people alone, and the interplay between such social relationships and the contextual information around the people also plays a significant role. However, these additional cues are largely overlooked by the previous studies. We found that the interplay between these two factors can be effectively modeled by a novel structured knowledge graph with proper message propagation and attention. And this structured knowledge can be efficiently integrated into the deep neural network architecture to promote social relationship understanding by an end-to-end trainable Graph Reasoning Model (GRM), in which a propagation mechanism is learned to propagate node message through the graph to explore the interaction between persons of interest and the contextual objects. Meanwhile, a graph attentional mechanism is introduced to explicitly reason about the discriminative objects to promote recognition. Extensive experiments on the public benchmarks demonstrate the superiority of our method over the existing leading competitors.